Carrington West’s contractor insurance partner, Kingsbridge, has released a white paper on the impact of IR35 on the UK contractor workforce. The report concludes that contractors are “weathering the storm”, and that contractors remain an important talent resource, bringing specialist skillsets and agility to organisations.
Since the most recent off-payroll reforms were introduced, the contractor market has been through a period of adjustment as organisations, recruitment agencies and workers reassess the financial implications.
This year’s annual whitepaper from Kingsbridge has taken a closer look at what has changed over the last 12-months and with almost 2,000 businesses including contractors, recruiters and end clients responding to the whitepaper survey, some interesting data has emerged.
Paul Havenhead, CEO, Kingsbridge says “Despite a challenging 12 months, both anecdotally and in our data, we’ve seen good business continuity for limited company contractors, who have once again, weathered the storm and continued to provide their skills and services profitably on their own terms, outside of IR35 tax regime.”
The whitepaper found that 63% of contractors stated it has been ‘easy’ to find outside IR35 contracts over the last 12 months. This was corroborated by recruiters reporting that outside IR35 roles made up 58% of their advertised roles, an increase of 40% on last year’s data. When asked some forecasting questions around PSC engagement, 52% of recruiters believe that availability of outside IR35 roles will continue to increase over the next 12 months. In almost perfect corroboration, 54% of end clients reported that they also intended to use more limited company contractors in 2023.
The HMRC’s CEST tool (Check Employment Status for Tax) did not fair too well in the survey, with 50% of contractors saying they don’t trust the tool. While 34% of contractors and 37% recruiters said they would choose not to work with a client based on their decision to use the CEST tool and 48% of end clients also saying that they don’t trust CEST either.
